I don’t like clutter at all, but it’s oh so easy for stuff to build up and get out of control â€“ especially when it comes to paper. If you really like everything to be neat and tidy â€“ but you don’t want to spend your life managing the mess â€“ read on.

The problem with paper

I dream about going paperless. But the fact is that there are still occasions when I need actual documents to prove my existence, prove what I’ve earned, or prove that I spent my hard-earned cash on whatever.

The problem with paper records is that they come in one at a time, from different sources. That means that they could end up in my car, my wallet, my jacket pocket, or my desk at home. Making sure they all end up in a central location that keeps them safe and still accessible whenever I need them is a bit of a chore.

Decide on a system

What works for me is a system of three sets of folders: monthly, topical, and important documents.

I have three areas for my records too: a small filing cabinet for the files I use regularly, small plastic filing boxes that I usually keep in storage, and a fireproof safe that I can grab in the event of an emergency.

Monthly folders for receipts

The heart of my filing system is the monthly folder. I have one folder for each month, and it’s super simple. Here’s what I throw in there:

Whenever I have downtime or just want to get rid of the clutter on my desk, I spend a few seconds to grab whatever receipts or documents I’ve collected, sort them by month, and put them in the corresponding folder. That’s it.

Topical folders for easy reference

There are some documents I don’t want to keep in the monthly folders, though. For example, I like to keep all the maintenance records for our car in a single folder so I don’t have to search through all the monthly folders just to find a particular receipt. I set up topical folders to keep certain records together so that I can refer back to them easily.

I devote sections in the filing cabinet just for topical records folders that relate to each other. Even though they’re in separate folders, I keep the car purchase documents, the loan statements, and the maintenance records together in a particular section.

You may want to devote a section to your medical insurance records, investment statements, school records, your children’s sports activities â€“ anything you want to keep together in one place because you may need to refer to it this year, next year, or even a few years down the road.

Here are a few special topical folders that I keep in addition:

Bills to be paid

Some bills that come in the mail may not be due for a few weeks or months, so I have a special folder just to keep any bills I have yet to pay together in one place and off my desk. Some examples are the car registration, a license renewal, a dentist bill, or the gardener’s monthly statement.

Tax records

I make a separate file folder to keep anything that is important for that year’s tax return. Then when we prepare our taxes, the actual returns are also put in the hanging folder in front of that year’s monthly receipts files.

Wallet contents

I made copies of everything in our wallets and keep the folders in the topical folders section. That way, if one of our wallets (or anything in them) is lost or stolen, I have the correct contact information within reach. Here’s what I keep a copy of:

Driver’s license

Debit cards/credit cards

Medical insurance cards

Hotel loyalty cards

Grocery reward cards

U.S. passport

Yearly file storage

Every year, I move the monthly folders and tax folders into a plastic filing box and put them in storage. I used to keep them in a larger plastic bin, and I could keep something like five years of records in one box. But it didn’t really work well for me because the larger bin was too big, heavy, and unwieldy. Yes, they were out of the way in storage; but if I needed some of the records, I had to get all the records.

In the end, I decided that smaller plastic boxes would be easier. I wanted to keep all the records for the year in one little plastic box so I could just grab the year I was interested in and leave the rest in storage. But I couldn’t find exactly what I wanted, so I opted for a larger size and now keep two years’ worth of records in each box.

The larger size is still a little too big, so I decided to keep other things with the records — like Christmas cards that have family photos and other mementos of things that happened during the year. You can take organization even further by creating a list of each box’s contents if you want to, but I haven’t spent the time to do that because the contents are fairly consistent year to year. But I still think it would be nice to have each year’s records in its own box.

Grab-and-go files

This is the most important part of the system. I keep our most important documents (the ones that I need access to from time to time) in a fireproof safe. It’s heavy, but it can be carried.

It contains more than documents at the moment, but the important documents are things like our certificate of marriage, Terry’s DD Form 214 from the Navy, and other files we think are important or difficult to replace. We keep it near an exit so we don’t have to go far to get it in an emergency.

You may want to keep important documents in a safe deposit box if you don’t need access to them very often.

Decide when to let go

A good filing system includes a plan for when to dispose of records too. I haven’t done this yet, but I want to start giving each file an expiration date so I know when it’s okay to discard or destroy the documents.

When you’re adding to a topical file, for instance, think about whether you need to keep every â€¦. single â€¦ document in the first place. Do you need to keep all of the declarations pages for your auto insurance since the inception of the policy or is it enough to keep the most recent page? Maybe you decide to keep a year’s worth or the last five years or whatever.

What you need to keep â€“ a simple checklist

Everyone is different, so it’s not easy to come up with a hard-and-fast list of all the documents you should maintain. But generally, you should keep documents that help you prove your income and how you spent it, documents that help you manage your finances, documents of legal significance, medical records, and things that are important to you or of interest to you. [In case you scan your documents and receipts, here’s the IRS Revenue Procedure 97-22 (PDF). The rules about electronic receipts start at page 9.]

Here’s a simple checklist to get you started:

Basic documents to keep

Legal records

Birth certificate

Social security cards

Passports

Property deeds

Car titles

Wills

Financial records

Loan records

Lease records

Banking records

Credit card statements

Investment records

Tax returns

Income and expense records

Insurance records

Medical records

Auto, life, and home insurance policies

Miscellaneous records

Major purchase/repair documents

Warranties

Owner’s manuals

Education records

Employment records

The tools I used

Most of my records are 8 ½ x 11 or smaller, so all of the manila folders and hanging folders I use are letter-size. And I love labels, so I use full-cut manila file folders that let me slap as many labels as I want across the top of the folder.

And I love it when my labels are printed and look professional. I still use the Dymo Twin Turbo label maker I bought years ago when I had my own company. It’s certainly not a necessity, but it makes me happy. I also have a bunch of Smead color-coded alphabetic labels left over, so I use them too. Again, not a necessity, but I really appreciate the year stickers. That tells me at a glance which year’s receipts are in a particular folder and/or how many years I’ve had a particular account (because I keep adding each year’s label to topical folders).

The color-coded labels tend to lose their adhesion and come off, so I put a Smead clear label protector on the folder as well. It keeps the labels from lifting off the folder and it keeps them clean as well.

I use Pendaflex hanging folders in different colors as a cue so I can easily see where the different topical sections in the filing cabinet begin and end. I like how the plastic section labels can be moved so they’re all on the right side, the left side, the middle, or anywhere in between. Again back to the labels, I use the P-Touch label maker by Brother to make the tabs stand out.

What doesn’t work

You’ll know if the system you set up doesn’t work for you â€“ because you won’t use it! Start with the end in mind. Think about why you need these records and how you use them. Then think about your schedule — how your day goes, how your week goes, and what you do seasonally — to help you find convenient times to keep your filing system up to date.

Files with metal fasteners

I don’t use metal file fasteners anymore. I used to love having everything in a folder be all neat and orderly, but I don’t have time to punch holes in the documents and fasten them in chronological order anymore. I just throw them into the monthly file and I’m done with it. If I have to find something, it’s not hard to sift through a month’s worth of receipts to find what I need. After all, there are only 12 folders to go through, and I usually know which month I’m interested in anyway.

Paper clips

If I decide to keep multiple years in one file, I like to separate them with binder clips instead of paper clips. Paper clips tend to catch on other pieces of paper in the folder making it easy to lose a document in the wrong group. If the group of documents gets too big, I separate them into smaller sections â€“ like maybe separate months.

An inbox

An inbox doesn’t work for me. It’s easy for things to get buried in a pile documents. In my way of thinking, an inbox that sits on the desk is where documents go to die. However, I don’t mind a vertical file holder sitting on a desk. At least that way, the folders are visible.

What I need to do next

Buy a shredder. I need to get rid of old documents, but I don’t want to just load up the trash bin with our personal information.

Organize my computer files. I’m hoping to get a new computer soon, and I want to set it up so my important computer records are secure too. My next task should be to get rid of the old documents on my existing computer before I transfer files to a new computer.

Paper records can be a nightmare to manage, but over the years I’ve developed a system that makes it a lot easier to maintain during the year. I usually make time in September/October to get the next year’s files in order so that I can enjoy the holiday season and still be fairly organized when tax season rolls around.

Do you have a system in place or will you start one this year? How do you organize and protect your records? What tools do you use?

For digital, the best tip I’ve heard is to keep an off site back up of your files. (If, God forbid, something happens to your home, having everything backed up to a hard drive in your desk drawer isn’t going to help you much.) I’m wary of cloud-based storage systems, so I keep a back-up of important files in my safe deposit box at the bank.

A question for Linda and others: if you receive bills and statements electronically, do you even print them out or just file them electronically? I keep hearing that I should print stuff out once and a while “just in case”. Thoughts?

I couldn’t agree more about the cross-cut shredder. Even if they’re more expensive, I think it’s well worth the cost.

I usually don’t print out electronic statements or receipts unless I need to dispute the transaction or it’s a really important transaction. But I like your idea of keeping backups of your computer. I’m still a little leery of leaving things like that in the cloud too.

It depends on when you need the title. I would keep a car title in a safe deposit box unless and until I needed it to sell the vehicle or prove ownership. If you need access to it, I’d suggest keeping it in a lockable fire safe or lockable filing cabinet or drawer.

Awesome post!!! The monthly ordering of all the financial documents can very manage all our financial hassles created. this easy process of documentation can save our confidential documents and keep them arranged all time. Thanks for sharing these ideas.

Thanks! I agree that staying on top of records is really necessary to make progress on your finances. It can save you a lot of money — having everything ready to prepare your taxes properly and on time, being able to dispute erroneous charges to your debit/credit cards — and time in the long run.

Enjoyed this post. I would be interested in the details of your fireproof safe and any recommendations you have. I just have my important documents in a file cabinet now and have thought about moving them some place more secure.

Our fire safe is manufactured by Sentry. I think it’s the Sentry Safe 1170 model. It’s roughly 13x15x12, and the inside is designed to allow the Pendaflex hanging folders to hang like they do in your regular filing cabinet. It costs in the neighborhood of $90+, so figure about $100 with sales tax.

We used to keep our important documents in a regular, plastic filing box and kept it near an exit. The thought was if you grab anything in an emergency, at least grab that and go. But that doesn’t protect against fire if you’re not there, so I’d recommend the fire safe if you can. It’s an added protection that it’s lockable too.

I actually use an in box, but it doesn’t sit on my desk. I have a shelf in my bookcase where it lives. I throw all paper which needs processing into that box, and at the end of each month, spend about 20 minutes to scan each document with my scanner. I have keystroke commands set up to relabel each document and move it to the appropriate file on my computer. (Fujitsu scanner, iMac, typeit4me, and hazel). That part takes another 20 minutes. I backup the computer files automatically to 2 separate hard drives and once a month to a drive that goes offsite. The original receipts go to a physical filing system sort like the one you are using. It’s very fast for me, and isn’t irritating to me. I am retaining the IRS receipts for 7 years, by tax year, and the computer scans forever. (I’ve been filing since 1978.). If I need a receipt, I print it from the scan. I’ve had zero issue with anyone taking,a scan, but could get out the original if within the last 7 years. The IRS takes scans, too.

I have digital backups of all of my photos that live in the safety deposit box with titles, stock certificates and other valuable papers.

While I applaud the filing system, I can’t help but wonder why you don’t go paperless. Yes, I agree you do need paper documents sometimes, but if you scan the original into your computer, when you need a paper version, printing it out is the same as a photocopy. Obviously, some documents – birth certificates, car titles, etc – have to be originals, but most everything else can be scanned.

Bonus benefit: if you get your bills delivered electronically, they will most likely by in PDF form. Windows machines can index the text inside PDF files, so you can now search all your bills.

And as for bills that are due in the future – the day I get the bill, I go to my bank’s website and use their bill pay system to make a payment, but I put the payment date one day before the bill due date. I don’t pay the bill early and I never have to think about the bill again.

For bills I can’t get electronically (like from my gardener), I scan the paper bills into PDFs using the shareware program Scan2PDF. Those are converted as images, so you lose the text-searching capability though.

I use Carbonite as my backup service, so all my files are saved offsite.

My postal mailbox now only contains junk mail and stuff I have specifically ordered. I have a single drawer containing paper files that have to be in paper form. Lots of space and trees saved!

Going paperless does require a fair bit of planning and infrastructure, and I’m not there yet — but I definitely want to go that direction. Until then, I still need to manage the records. One concern is that some retailers lag in their infrastructure and return policies too. I believe that some may still require the original receipt, silly as that may seem.

Wow, excellent organizing system. Mine is not quite that complicated and I am currently struggling with how to streamline these documents/record keeping, since it’s becoming a mess. But one tip I got is that I kept a bin where I toss all the paper I want to shred, once it build up enough I take it to a local shredding place (they charge $5 or whatever) to shred it. I had shredders in the past but they have a tendency to break down after a year or two of use!

I use the Paperless application with a ScanSnap scanner to scan and organize as much as I can, stored locally on my Laptop. Use a USB 3.0 external 3 gab hard drive for time machine backup, then subscribe to Crashplan for offsite backup ($13/month for up to 10 computers).

It is sad to see someone organizing paper files in this day and age. I went paperless four years ago when I loved into a Winnebago motor home full time. There’s no room for boxes of paper!

I solved almost all problems by purchasing an rather expensive Evernote scanner that quickly scans both sides of every piece of paper sent through it. It accepts stacks of paper up to 50 sheets at a time. Press a button and 50 sheets of paper (100 sides) get scanned and placed both in any hard drive folder you specify plus in Evernote (which then OCR converts the documents over the next few minutes). Need to find something from a few years ago? The Evernote software can find it within a 2 or 3 seconds. I also “scan” a few items by taking pictures of the item with a cell phone camera, then filing the results in the same folders as the Evernote scans and in Evernote.

I still have physical copies of my drivers license, passport, a medical ID card, and automobile titles, although I also have scanned images of them as well. Everything else is digital only; all other documents, bills, prescriptions, insurance documents, owners manuals, and more exist only as digital images. Once scanned, all paper is thrown away.

Life is much simpler without paper! No complicated filing system is required as I can find anything in the thousands of scanned images within 2 or 3 seconds.

When filing put all of your files into one folder your DropBox / Box / iCloud / Google folder (whatever you use). Do not put them into individual folders for dates or types of document – everything you need to search is contained within the file name.

Now finding anything only requires you to search the file names based on what you are looking for eg “2015 dentist invoice”.

Download the DropBox / box / iCloud app for your phone and the documents are always with you when you need them and hey are backed up to an offsite location.

This obviously will not feed any stationery habit you may have, but will definitely save you time in the long run.

I guess the advocates of paperlessness are young enough that they haven’t had a bunch of stuff become unreadable because the format is no longer supported. I do go through my receipts when the credit card bill comes, make sure they match, move any money around from my special savings accounts that’s necessary, and then shred them, unless they’re for car repairs or things expensive enough that I might actually make a warranty claim.

I am the person who posted the comment about going paperless. Thank you for calling me “young.” However, I should mention that I celebrated my 70th birthday last month and I have been storing things digitally for years.

—> that they havenâ€™t had a bunch of stuff become unreadable because the format is no longer supported.

That is a trivial problem and is easily solved. I have been in the computer business since 1966, starting with 80-column punch cards and large reels of magnetic tape. Much of that information in the corporate world is still available today in more modern formats simply because the companies that had that info on old media converted it every few years to whatever media was then in use. Every data processing shop knows how to do that as do many individuals. It is easy to do.

I do similar filing of non-receipts and major receipts as tidyfreak above and it’s worked well over the last few years. I scan most non-major (groceries, general household items, etc.) receipts into Quicken, which I realize is a proprietary format, but I’ve used Quicken for many, many years to help me keep tabs on finances, and expect to continue using it. If the day comes where I no longer use Quicken, it allows exporting to PDFs, JPG, etc. When I keep on top of it, not keeping paper around feels good to me.

I also look for PDFs or just scan of instruction manuals and toss those. So much easier to find something on the computer than searching through physical files. Ditto for statements, bills, etc.

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My name is J.D. Roth. I started Get Rich Slowly in 2006 to document my personal journey as I dug out of debt. Then I shared while I learned to save and invest. Twelve years later, I've managed to reach early retirement! I'm here to help you master your money — and your life. No scams. No gimmicks. Just smart money advice to help you get rich slowly. Read more.

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